A Novartis Giveaway of Medicine

Thursday

Jul 29, 2010 at 5:13 AM

The Swiss drug giant will give away up to 250,000 bottles of a liquid medicine to woo parents frustrated by the recall of liquid children’s Tylenol.

NATASHA SINGER

The Swiss drug giant Novartis plans to give away up to 250,000 bottles of its new liquid children’s medicine, Triaminic Fever Reducer Pain Reliever, in an effort to woo parents frustrated by a nationwide recall and shortage of a competing product — liquid children’s Tylenol.

Both the Tylenol, made by a unit of Johnson & Johnson, and the new Triaminic product contain acetaminophen, a drug that mitigates pain and fever. Novartis valued its marketing program, which offers rebates to consumers who buy the Triaminic fever medication from Aug. 2 through Aug. 8, at $1.5 million. Triaminic, a 50-year-old brand, already makes children’s cough and cold medicines.

Industry analysts said Novartis had made a strategic move to gain market share at an opportune moment.

McNeil Consumer Healthcare, the Johnson & Johnson unit, recalled an estimated 136 million bottles of liquid children’s Tylenol and other pediatric medications in April because of manufacturing deficiencies.

McNeil, to make an upgrade, has closed a Pennsylvania plant that made the drugs in the recall, causing a shortage of children’s medications at many drugstores.

“If you are going to take on children’s Tylenol, now is the time to do it,” said Mick Kolassa, the chairman of Medical Marketing Economics, a firm that consults with drug makers about product marketing and pricing. “It’s a beautiful opportunity. There’s concern. There’s a shortage. There’s a wide opening in the marketplace.”

Sales at McNeil fell $200 million in the second quarter because of the recall and plant shutdown, Johnson & Johnson executives said last week during a conference call with investors. They estimated that the problems at McNeil would reduce annual sales by about $600 million.

McNeil brands like Tylenol, Motrin and Benadryl have long dominated the market for children’s medicines. But many parents were frustrated by the scope of the recall, said Dr. Jeannette Levenstein, a pediatrician in Encino, Calif., who has written about the issue on the parenting Web site strollertraffic.com And, she added, they have been frustrated by a dearth of generic alternatives.

“It certainly has put a dent in our parents’ capability to keep their kids’ cool and their own sensibilities in line when they are clamoring for generics and they are nowhere to be found,” Dr. Levenstein wrote in an e-mail on Wednesday.

Now Novartis is hoping to build brand loyalty with its new children’s fever and pain relief syrup.

The company was developing a fever product before the Tylenol recall. But the company sped up the introduction of its product to fill a void in the marketplace, a company spokeswoman said.

“We accelerated the timing because, given the lack of availability of some over-the-counter children’s analgesic products, we felt it was an important time to offer parents a reliable fever reducer and pain reliever product for their children from a trusted brand,” Julie Masow, a spokeswoman for Novartis Consumer Health, wrote in an e-mail.

The Triaminic giveaway uses the slogan “restock your medicine cabinet,” a phrase intended to remind people of the McNeil products they may have thrown out because of the recall, Mr. Kolassa, the industry consultant, said.

“It’s saying, O.K., you’ve gotten rid of the Tylenol because of the problems and now here’s a chance to replace it,” Mr. Kolassa said. “It’s a savvy move.”

Even so, some industry analysts said it was difficult to quantify the size of the market opportunity for products that compete with children’s Tylenol.

“Novartis is trying to take advantage of this opportunity to capture a portion of the market left vacant with a brand that will reassure parents,” two analysts at Raymond James wrote Wednesday in a note to investors. But consumers could turn to generic alternatives, the analysts wrote, so “the impact for Novartis is tough to evaluate at this stage.”

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